How has the pandemic affected access to cash?

I share your concerns, Alistair, but you have spoilt your argument by referring to “naive youngsters”.

I don’t agree I have spoiled my argument at all. Many youngsters are naive about the risks of a purely digitised monetary system, seeing only the convenience and none of the risks. It is only when you have been around as long as I have that you learn that you cannot always trust governments and banks to do the right thing by the public. Also, one way that governments successfully implement radical change is by “recruiting” society’s youth into their plans, painting old foggies like me as out of touch and irrelevant. And most young people do not have much savings behind them, so they have little to lose (and much to gain in mortgage terms) by implementing a negative interest rates policy. So young people are very much a tool in ensuring the government can implement the negative interest rates and digital money plans, and therefore in my opinion, I have not “spoiled my argument” at all, but rather indicated how governments use young people to implement their devious plans.

A great many older people have moved to using cards, online banking and mobile banking too. Although I’m one of them, I have posted a large number of comments in other Conversations in favour of retention of cash for everyone who wants to use it. The banks have been allowed to close many branches without ensuring that their customers have adequate access to cash and banking services. Small businesses have a problem if they cannot bank their takings nearby. Which? continues to campaign for access to cash.

Even without the help of the youngsters, use of cash now represents a minority of the money that is shuffled by people and businesses.

Although I don’t believe that the government or the banks have done enough to help those who need to or want to use cash I am not aware of any evidence that we are being manipulated into becoming a cashless society.

The banks wanted to get rid of cheques in the UK but we managed to retain them for those who want to use them. Cash and cheques are still the easiest way of paying a neighbour who has collected some shopping for you, at least for most people.

There is a good reason why some shops have stopped accepting cash at present and some of us have not been in a shop for months. If there are enough people who want to use cash it’s likely to happen when the current emergency is over.

There are some practical problems. Our micropub near the market place in town started using one of these portable contactless card readers but had periodic problems and he switched to FTTP broadband instead. This resolved problems and people can choose whether they pay electronically or by cash.

Would it be reasonable to require the traders that turn up weekly to run market stalls to use a system that might prove unreliable?

There are dedicated solutions for mobile merchants, such as street market traders. For example Sumup.co.uk provides a 3G card reader. I should also mention that Sumup.co.uk is one of the most expensive at 1.69%, but it’s a good benchmark as most providers don’t publish their fees. If any merchant is paying more than 1.69%, then they shouldn’t be.

I don’t agree that it should be compulsory for all traders to have facilities for accepting card payments. Many stall holders and street vendors only handle cash and do not necessarily use cash registers. Car boot sales and charity stalls and sales should not have such impositions placed upon them. Most card holders should be able to draw cash from a machine relatively conveniently if they are in a place where trade takes place regularly; for occasional buying opportunities they will need to go prepared to spend folding money.

I’ve checked with a friend who, under normal circumstances, visits the local market weekly and it seems that all the traders use cash, not cards etc. I’m aware that some markets are different.

Yes I would like to see traders accepting cards, and also others to accept cash. I take your point about tax evasion but perhaps tax avoidance by large businesses also deserves attention.

John, anyone operating a retail business (which does not include an individual selling one-off in a car boot sale) in this day and age should accept card payments. There is no excuse not to do so, even street market traders and ice cream vans. Why consumers be forced to use cash? Even though banknotes do not tend to habour viruses, coins do pose a health risk. I don’t use coins, as they are inconvenient and bulky, and easily lost. Why should I have to accept coins in change instead of paying with a simpler and cleaner card payment?

I see no reason why both forms of payment should not be accepted. I like to see the consumer having a choice. Do we have to give all children credit cards? Or a pre-loaded card? I think handling cash at an early age gives children a feel for real values and using limited funds in a wise way.

NFH – Under normal circumstances I almost always have the choice of how I pay (I don’t visit market stalls often) and I’m keen that we all have and retain this choice for the foreseeable future. As of January I have been using mobile banking and you might find me using Apple Pay before long, but when the charities I’m involved with are back in action, cash will become an important part of my life again.

NFH – I see no reason why traders should not accept card payments but I also think they should have the right to accept legal tender only if that is their preference. If that means they lose potential customers then that is their risk, and if customers do not have cash to pay then they will have to make their purchase elsewhere. If a trader wants to take cash only then they would be expected to put up a notice to that effect to avoid possible customer inconvenience.

I expect before long all retail businesses will accept card payments which will solve the problem and private clubs and voluntary organisations can do what they like for their own convenience. Even charity collectors will take payment by card nowadays so it’s only a matter of time and no legislation will be required. The important point is that cash should still be acceptable but the health risk issue, which might be more potential than actual, takes on a bigger dimension now

Malcom r, wavechange and John Ward – I agree with you that retail businesses should be allowed to continue accepting cash, or to refuse to accept cash, as they prefer. The only change I am advocating is that irrespective of their cash policy, all retail businesses should be required to accept the most common debit cards with no minimum transaction amount. In practice, such a requirement would result in nearly all also accepting credit cards.

I have no objection in principle, NFH, though it would be interesting to know the views of the businesses concerned. With fewer people carrying cash it would be in the interests of businesses to accept cards and the need for legislation could be unnecessary.

Wavechange, I agree that the legislation is largely unnecessary in the UK, especially in London, but legislation is still needed to fill in the small gaps of retail businesses that continue to refuse cards or to impose a minimum transaction amount on cards, for example car washes and small shops. Consumers should have the automatic right to pay with cards at all retail businesses, and should never be forced into using germ-ridden cash.

We are still uncertain about transmission of coronavirus, so precautions are being taken to avoid contact with cash, letters, handles of shopping trollies, etc. though I know of no documented cases of these being responsible for infection. Under normal circumstances I am not aware that handling money poses a significant risk of infection for those in reasonable health. At present I would be far more concerned about the risks of using public transport, flying or even going into shops. I hope that concerns about infection are not used as part of the argument for getting rid of cash until there is clear evidence to implicate handling of cash as a mode of transmission of infection.

It would be good to see all small businesses prepared to accept cards and not impose a minimum payment but as I said, the views of would be useful than mine. Should they also be required to accept cash?

I wash my car by hand or more often use a pressure washer. On the few occasions that this has not been possible I’ve used a car wash at a supermarket filling station and they accept cards.

I’d like to make it clear that I have no personal agenda here. Although I have never needed to make a Section 75 claim, the existence of this protection means that I generally pay by credit card and have done since surcharges were abolished. My concerns about access to cash are on behalf of those who wish to carry on using it, for whatever reason and, as I have mentioned so many times in our discussion, the needs of small charities.

I do think that consumers should have the right to make payments such as £1 and £2 by card. For someone who lives their life cashlessly, it is very irritating to have to go to a cash machine, withdraw £10 and then get £8 or £9 in change. What does a cashless person then do with that change? It’s very difficult to deposit back into one’s bank account.

I agree. Fortunately, most of the notices about minimum card payments have gone round here. My solution for getting rid of excess cash is simply to spend it or put it in a charity box. I do retain some for parking meters.

You can “get rid of” excess cash by spending it on something you need. I don’t use much cash, like most people. My recent transactions have been posting some folding money to a grandson for his birthday, paying a gardener, and pre-COVID paying £2 a session at a village hall short mat bowls club for an evening game. Should they have a card reader?

Malcolm, you can’t spend excess cash unless you carry it around with you (which is a hassle) and something you need to buy happens to cost less than the bunch of change in your pocket. It’s just not practical or convenient. That’s why I use cards (preferably Apple Pay on my Apple Watch) for everything, no matter what the amount.

NFH, I’ve a wallet for cards and notes, a trouser pocket for coins, and a purse in the car for extra bits of cash. It is no inconvenience at all. So if I go for a £2 games of bowls, give to charity, buy a newspaper ( I don’t – not worth buying), buy a lottery ticket, buy tomato plants from a neighbour, pay for car parking, I either need to, or may prefer to, use cash. As we see from the campaign to retain access to cash their is still a huge demand for it. If it dies a natural death with people’s willing assent, that’s fine; to murder it against people’s wishes is not fine. We should all have a choice.

I’ve not really found it inconvenient to use cash and operate in the same way as Malcolm.

It is a pain to find £150 in a charity collection bucket, including the odd old £1 and Latvian coins. I have to count it, pay it into the charity’s account and then spend the cash. I don’t usually have to go to an ATM all summer. The owner of the micropub is not keen on me handing over a pile of coins but on the other hand he wants my custom. Still, our charity is keen to accept money in any form. The pandemic has affected our income and there are still bills to pay, so for the time being we are using crowdfunding.

If legislation is required to bring about compulsory acceptance of card payment then there will be a long wait. I just don’t see it being on the government’s agenda and so far as I can see there is no pressure from MP’s for it – maybe because they see it as the slippery slope on the way to abolition of cash which would not be popular electorally.

In places like city centres, business districts and tourist hot spots it will probably become the norm by its own momentum but I feel there will be resistance to its being forced in rural areas where most trade is conducted within a set customer base that is not inclined to change its ways and so for whom the card acceptance option is redundant.

Driving around country areas [when permitted] we often come across roadside stalls selling plants or eggs or fruit or jam, etc, with just an honesty box for payment. There would have to be some exceptions for such situations so they are not obliged to provide a card payment facility. The same goes for many churches that are open unattended to visitors; buying a publication or giving for a candle would be unduly complicated unless there are cheap chip-&-PIN machines that the visitor can set up themselves from a pre-set menu to enable the transaction.

I suppose those for whom cash is a nuisance or just unnecessary must be missing out on various interesting opportunities to enrich their lives at little expense.

I see no justification for anyone to be forced to taking card payments.. If, Having considered the consequences, an organisation is happy to just take cash then this should be their choice. They are commercial schemes making money for the card companies in return for commercial advantages to the business owner. But I do not see why they should be given the legal right to take 1% (or whatever) of every transaction we make – are the fees regulated?

What happens when the systems crash or their is a local power failure? Must all trading stop?

Malcolm, yes, the fees are regulated. Regulation (EU) 2015/751 has capped interchange fees to 0.3% for credit cards and to 0.2% for debit cards since 8th June 2015. This paved the way for a ban on retailers surcharging to accept card payments since 13th January 2018 under Article 62(4) of Directive (EU) 2015/2366 and Regulation 6A(1) of the Consumer Rights (Payment Surcharges) Regulations 2012.

But above you say Sumup charge 1.69%

The company or other organisation pays this charge, as it does for providing credit/debit card services. Of course these charges are recovered in higher prices for goods and services, like the costs of processing cash transactions.

Yes, Malcolm, the merchant services provider often adds a lot more than 0.3%, as much as 1.69% for Sumup.co.uk, but many retailers pay much less. The total charge to merchants used to be much higher before the EU regulation came into force. Look at what retailers in the United States pay for example – often 2% or 3%. The downside of the cap on interchange fees is that it limits scope for credit card issuers to give points, airmiles or cashback. These perks are a huge industry in the UK and US, but much less so in the rest of Europe.

Wavechange. That was my point. As far as I can see significant charges are involved and the consumer pays.

I appreciate that banking cash also involves a cost that would be recovered in a business’s overheads. However, if we could establish a UK-wide scheme where businesses that take cash also dispense it – so with the decline in traditional cash points far more people than at present could easily access cash – many businesses may not need to bank or withdraw cash as often, or at all, and avoid handling charges. Just recycle the stuff.

NFH. Thanks. But I don’t want or need to earn air miles, cashback or points. I am, through card charges, paying for something with limited redemption options, for stuff I most probably don’t want.. I want to pay what it costs for what I want to buy, and no more.

Malcolm – I would like to know what the comparative costs of using cash and cards. I have a friend who has been running a business for about 30 years. He often works long hours and I called in one evening and he showed me what he pays in charges for accepting cards which did surprise me. I cannot remember the details but I think it depends on turnover and what has been negotiated with the card provider. There were additional costs for leasing card readers and an internet or phone line. It would be interesting to get an idea of these charges from an independent source. Handling cash will have been made more expensive for some businesses as a result of closure of local banks.

There are so many cases where it seems unlikely that all small businesses could be expected to accept card payments. We have a fish & chip van that turns up on Tuesdays and the mobile signal is rotten in the village, so no landline and no 3G card reader. I like to buy eggs from one of the local farms that has an honesty box. I suppose that counts as a business. There would need to be exemptions if businesses were expected to provide card services.

I believe the idea of businesses distributing cash came from the Access to Cash review, I believe, but so far I am not aware of moves to roll this out nationally. If this is to happen then should be done before removing any more ATMs except in areas where there are obviously more than needed.

NFH – If credit card providers give points, airmiles or cashback that has to be paid for, so the rest of us have to contribute towards your perks.

Re businesses distributing cash. I did propose this several times before the Access to Cash report was published. It was in the ATM Convos.

There was no response to the idea from Which? who seem fixated on preserving or increasing all ATMs, irrespective of those little used in clusters. I think they should broaden their approach and consider additional initiatives, particularly when they might benefit a much greater number of people, particularly in more isolated and less populous locations.

It seemed like a sensible suggestion at the time, and still does. It needs some means to organise the businesses involved and set up a fee scheme; I imagine it could work rather like the ATM LINK scheme.

Some businesses have distributed cash for years via cashback for customers and others have provided and maintained ATMs, usually accessible to anyone. Other initiatives to make cash available, preferably for all, would be welcome, especially in areas where there is a clear need following ATM removal, often as a result of bank branch closures. One of my suggestions has been to enable self-service checkouts to distribute as well as collect cash.

The Link scheme was an excellent example of banks working together to support their customers and for mutual benefit. I hope that the banks will recognise the need for coordination of provision of cash for consumers and provision of adequate services for businesses. Had this been done in a timely fashion we would not be having this discussion.

I have not seen evidence of Which? being fixated on preserving or increasing all ATMs, which seems an unfair allegation.

Which? have campaigned to protect ATMS but have not thought to examine additional ways of making cash available, something that would help far more people. I’d like to see a more open minded and constructive approach.

I have commented previously about misleading information presented on ATM closures and conversions.

If some ATMs are not used to make them commercially viable, as cash withdrawals diminish, if there are surplus ATMs in groups, then we need to think objectively about dealing with such change. In some instances we can subsidise ATM operation by increasing fees; in others where an ATM is threatened we might protect it from closure. Both done by LINK.

But, inevitably, ATMs are less used and action needs to be taken. There is no need to install and service an expensive machine in areas where it will get little use if other options are available, such as post offices, or if new options can be made available, such as distribution of cash, without a purchase, from businesses.

Why have Which? not explored this? I don’t think it is at all unfair to expect Which? to be constructive in its approach and to consider the future of the ATM network in a realistic way.

Wavechange – I endorse Malcolm’s comment.

So far as I recall, Which? has not made any substantive comments to contributors in the Conversations in which access to cash has been discussed. It has declined to respond to – or completely ignored – any suggestions raised for inclusion in its campaign. Semantically that might not represent a fixation but it appears that way. The campaign was entirely loaded with numerical statistics on ATM withdrawal even where this was shown to be non-detrimental.

The Access to Cash review states on its first page a comment from Which?:

“It’s essential that people’s freedom to pay for goods and services however they choose is protected as we transition to an increasingly digital society. The work of the Review is fundamental to identifying some of the ways this transition can be managed. There are also urgent actions for the Government in this report, and a clear need for strong regulation to protect the interests of millions of people who rely on cash in their day-to-day lives.”

Which? claims that it has managed to get the problem on the agenda of our government and although others have been pushing for action, Which? seems to me to have been the main driver.

In rural areas, consumers and small businesses have been let down by the banking industry. PSR should have pushed for adequate and practical provision of services.

Which? have invited us to provide examples of how removal of branches and ATMs have caused problems for consumers and numerous examples have been provided, mainly in the earlier discussions.

It is up to the industry to provide solutions and while we can all provide our ideas of how this could be achieved it’s hardly likely to make any difference. None of us outside the industry know about the costs and practicalities.

Perhaps Which? should be encouraging us all to take action beyond signing its petitions and providing our own stories. I have had discussions with Link, expressing concern about their ATM Locator, which relies on distances ‘as the crow flies’ rather than the distance involved in travelling to ATMs. To travel to my nearest ATM I would have to travel across private land and scale fences. Not only is this how they display information to the public it is how they assess distribution of ATMs.

This is an interesting debate, wavechange, in which I’ll repeat some of my views. We are in danger, however, of drifting into the domain of the ATM Convos and the moderators may wish to move comments.

The closure of a proportion of bank branches is a consequence of a major shift in customer habit to use online banking. The closure of many ATMs, often in clusters or relatively close together, is in response to a much-reduced demand for cash. We need, therefore, to consider how to best serve those who still need access to cash and physical banking against this background. We could insist that, whatever the cost, no branches or ATMs close and we subsidise them. Better, in my view, is to acknowledge change and develop new ways to deal with the consequences.

The Access to Cash Review considered a variety of ways this has been and could be done. Among other things It pointed out that 11500 post offices were empowered to distribute cash. It is also pertinent to point out that there are far more points where cash can be accessed, in these days of reducing usage, than when cash was in its heyday (see other Convos). This is the way forward, to think constructively about how to provide cash access in the future; not just to maintain what exists for those fortunate enough to be near an ATM, but for the many millions of others who are not, and never have been. That is what businesses redistributing the cash they take in could achieve, for example. I wonder why Which? do not look into this, rather than attempting to preserve the old?

The criticism of LINK is misplaced, I think. They have done, and are doing, a good job in dealing with the ATM network. Their ATM map is very good and accurate enough for the vast majority of people. The few exceptions, such as you describe, should not be used to decry it. Crow flying distances are good enough for the vast majority; I believe they are dealing with the issue but doubt it has a substantial effect upon distribution statistics. In previous posts I have illustrated where the ATM distribution has been misinterpreted to try to support the campaign; for those who notice, this simply questions the balance used in the arguments.

Maybe my view of a Consumers’ Association is at odds with the majority. I don’t just want a “something must be done” attitude. I want a “this is how we might do better” approach. If contributors to Convos can look at a problem and come up with suggestions worthy of consideration, then I’d have thought Which? could explore them and discuss with those they seek to influence. Otherwise everything we say here about 2 pin plugs, dangerous products from Amazon market place, appliance recalls, plastics in white goods, …. seems quite pointless. Which? Seem to have people with knowledge and investigative ability but if they were to sit on committees only with the attitude “something must be done” but no suggestions as to what might be done I’d suggest they’d be regarded with little respect. I hope that is not the case.

Wavechange, you are absolutely correct when you say to me “If credit card providers give points, airmiles or cashback that has to be paid for, so the rest of us have to contribute towards your perks“.

My advice to friends and family is to use a credit card for all purchases. Even if you’re not interested in earning points or airmiles, then at least get a cashback credit card. It’s very easy to earn up to 1% (sometimes more) on a cashback credit credit. For example, American Express cards without third party branding are exempt from the EU’s 0.3% interchange fee cap. And I find that almost everywhere accepts Amex nowadays. Even the few merchants I use that previously didn’t take it started doing so in 2019, leaving only one where I can’t use Amex.

If you pay with a debit card, then you pay 100% of the purchase price of the goods or services. If you pay with a 1% cashback credit card, then you pay 99% of the purchase price. Those who pay 99% are subsidised, as you point out, by those who pay 100%. Therefore it’s better to be in the group who pays 99%.

I prefer airmiles and other travel-related points, as they tend to be worth more than cashback. But cashback is a basic perk that you’re already paying for in the price of the goods or services.

At one time I used to use credit card points to buy store vouchers at a discount price, but I landed up with £180 of vouchers that were worthless. Since then I have not paid much attention. I think my cards do give a small amount of interest. I just wish that the perks did not exist.

I use similar justification when I negotiate my AA subscription down by 50% and when I choose an energy contract 30% less than others will pay, for example. I am aware that the profit margin the supplier requires will be insufficient from my contribution, so someone else will pay substantially more to make up for my gain. It is a selfish approach, but why not take advantage of it whilst the opportunity exists – if I don’t, others will. Is it wrong to have such differential pricing for the same product? I think it is, but then look at the huge differentials in pay and salaries. If you want a fair world there is an awful long way to go – an interminable journey, I would suggest. So just play the system to your advantage.

Those involved in the Access to Cash Report seem to have dealt with this for the present: ““It’s essential that people’s freedom to pay for goods and services however they choose is protected as we transition to an increasingly digital society. The work of the Review is fundamental to identifying some of the ways this transition can be managed. There are also urgent actions for the Government in this report, and a clear need for strong regulation to protect the interests of millions of people who rely on cash in their day-to-day lives.”

I use very little cash, but in Convos there have been many examples given why people want to continue using cash. Presumably representative of the “millions” referred to in the report. At, perhaps, an emotional level I have worries about a payments society where it is controlled by organisations making money from their plastic networks, I also have concerns as to what happens when the networks fail.

I see no reason why we should not continue, for now, to have a mix of cash, cards, bank transfers and even, perhaps, cheques.

I was thinking that during the pandemic could be a good time for those using cash to investigate other payment methods. I don’t see any chance that cash will disappear any time soon, even though some in rural communities are struggling with access.

I withdrew cash well before the lockdown and it’s still in my wallet. I have a couple of cheque books and paying-in books for when I need them.

Although I suggested I could probably manage with little use of cash, I will have to use it when our charity resumes normal activities and I’m faced with handling cash donations (and the odd cheque).

But taking your point, maybe we should fight against being charged for using ATMs to withdraw our own money. I’ve never used one so far and almost all the local ones are free but in some areas you have no choice but pay.

I remain fully supportive of everyone having a choice of how they pay. Amazingly I was able to pay-in some ancient travellers’ cheques recently. I had hidden them far too well in a suitcase years ago.

The large majority of ATMs are free to use. Intermingles with those are pay to use ones but, generally, with a free one within sensible distance. Some misleading information was published about this, a prime example being Gt. Yarmouth, again dealt with in previous Convos. We should be able to have a balanced discussion about ATMs without the need to distort information.

In many cases that is true but as some have reported, they don’t have a free (or any) ATM that is readily accessible.

And probably never have. That is the issue I am hoping we will address, but by other means than just ATMs.

Have a look at the comments posted in the Convos, particularly earlier ones. There are reports of ATMs being removed, often accompanying closure of bank branches, and also closure of Post Offices. I have personal knowledge of examples. There are plenty of newspaper reports too.

I tried to steer the Convo back to on topic and maybe we could examine why we might not be happy to use alternatives to cash.

I’ve just checked a typical year (pre COVID). Most of my spending is on credit card, bank transfers, direct debit and other electronic means. Despite this, my average monthly cash usage has been around £150. For good reasons. COVID – well, its just an aberration isn’t it as I don’t go to the places I used to. So I haven’t had to access cash. All will, no doubt, return to normal.

I have not used cash during the pandemic but I’m avoiding shops and contact with people.

I have no objection to you avoiding cash but I see no reason why you feel its so important we all do the same.

We can all do what we choose. By all means point out our reasons for that choice and illustrate what we see as the advantages but I’m sure no one sets out to impose their choices in others.

I might have a go using ApplePay before the pandemic is out. NFH has told us does not have a £30 limit like contactless cards. In turn I’ve been wary of credit cards, online banking, contactless cards and now mobile banking. I don’t recall being concerned about using an ATM card/debit card (I’m sure that they were separate at one time) and telephone banking.

Wavechange, yes, you’re right that Apple Pay does not have a transaction limit (e.g. £30 or £45). But a small minority of merchants, including large ones like the Post Office (and Co-op only for Amex), impose a limit in error and they are months away from fixing it. Apple Pay is also truly contactless, as it’s powered by a battery and therefore works from slightly further away than a physical contactless card.

Thanks NFH. I am trying to demonstrate that I am not opposed to electronic payment. I decided until I had a new phone, even though Apple was still supporting my 5S. I lost interest when coronavirus got in the way.

I’m keen that people should explore newer technology and discover whether their concerns are justified. Obviously there are precautions to be taken when using an old mobile for payments and banking. I think there is potential to get more people using phone payments and mobile banking for the sake of convenience.

Although I’m very keen that we help others learn new skills I am very strongly opposed to any form of coercion. Where I live up north most people use cash for small personal transactions and buy one or two items with cash. Until I had used a contactless card for a couple of years without a single problem, so did I. I am not sure why you want us all to move away from cash, although I accept that the government is losing out on tax. If I’m paying a contractor I wave a card rather than my wallet, with very few exceptions. There will be people who are comfortable with cash and some who don’t have a bank account, even some who are not allowed one. My priority is that they should be able to continue to use cash for the foreseeable future if they wish.